His Majesty The King Mohammed VI 7DEOHRI&RQWHQWV Activity Report 2010 0HVVDJHIURPWKH*HQHUDO'LUHFWRU +LJKOLJKWV ,QWHUQDWLRQDODQG1DWLRQDOFRQMRQFWXUHV 3HWUROHXP([SORUDWLRQ 3HWUROHXP3DUWQHUVKLSVDQG&RRSHUDWLRQ 3HWUROHXP'ULOOLQJVDQG3URGXFWLRQ 2LO6KDOH 0LQLQJ([SORUDWLRQ 0LQLQJ3DUWQHUVKLSVDQG&RRSHUDWLRQ 0LQLQJ'ULOOLQJ +XPDQ5HVRXUFHV ,QIRUPDWLRQ6\VWHP 0(66$*()520 7+(*(1(5$/',5(&725 their efforts in 2010 to foster Morocco’s hydrocarbon and mineral exploration. In Hydrocarbon Domain, ONHYM focused on the study and the reinterpretation of the geological and geophysical data of several promising areas in various onshore and offshore sedimentary basins. New play concepts and prospects have been identified and promoted to the international oil companies. Two new petroleum agreements and two new reconnaissance contracts were subsequently concluded, which have extended the licensing area by 5%. ONHYM continues its preparations for the drilling of MKL-110 appraisal / development well in Meskala and of BJD- 1 exploration well in Boujdour. After the development of shale gas in the U.S., ONHYM has added to its portfolio the shale gas exploration with the signing of an MoU and a reconnaissance contract, to evaluate the potential of these unconventional resources. For their part, ONHYM partners conducted two new natural gas discoveries in the Gharb. They also carried out the drilling of eight wells and the acquisition of 1336.38 km2 of 3D seismic, 795 km of 2D seismic, 18,572 km of airborne gradiometry, 1000 gravity stations and 568 km of electromagnetism. Deemed commercial discoveries have been the subject of concession application. In mining research, ONHYM has conducted the exploration on 17 objectives of which 9 for precious metals, 5 for base metals and energy substances and 3 for rocks and industrial minerals. The activity in partnership focused on 12 objectives, including 4 for base metals, 3 for 4 precious metals, 4 for the rocks and industrial minerals and 1 for uranium. The results of ONHYM own activity confirmed the interest of the projects related to Nb, Ta, U, Fe and light rare earth elements of which the preliminary estimate of resources has yielded encouraging results, to attract the interests of several foreign companies. These potentially promising discoveries, involving minerals of strategic importance, highly sought after in the world market, reflect the maturity of the exploration projects undertaken for several years and which have been conducted over very large areas, especially by means of an airborne geophysics. $FWLYLW\5HSRUW Two projects were sold to the private sector for their exploitation. In addition, three Memoranda of understanding, a protocol agreement and a farm-out agreement had been concluded. Our mining laboratories are certified in accordance with the new ISO 9001, version 2008. The implementation of the master plan of the Information Systems has continued according to the updated schedule. The flagship projects of implementing the information system recorded a significant progress and are at the final stages of their realization. In all domains, the standard methodology of project management adopted by ONHYM has been applied. The human resources management has received, according to an ongoing policy for a decade, special attention to maintain the staff excellent level of qualification and its motivated commitment for the achievement of the Office objectives. In addition, ONHYM works with the Department of Energy and Mines to define a new mining strategy, develop a new mining code and a regulatory framework for the extraction of hydrocarbon from oil shale, in order to give a better visibility to operators and investors in these activities. Also, the year 2010 was marked by satisfying and encouraging results, after a long 5 process for reinforcing a management culture of excellence, based on international referential adapted to the public sector. Those are the values that drive the daily work of the Office staff, to whom I pay tribute here for the professionalism and perseverance that allow us to continue to work with confidence for the economic and social development of our country, under the enlightened leadership of His Majesty the King Mohammed VI, may God assist Him. $FWLYLW\5HSRUW Amina BENKHADRA General Director +,*+/,*+76 Hydrocarbons objectives of which 4 for the base metals, 3 for precious metals, 4 for industrial minerals and rocks and 1 for Uranium. • Confirmation of the interest of the projects • Acquisition of 795 Km of 2D seismic, related to Nb, Ta, U, Fe and Light Rare Earth 1336,38 Km2 of 3D seismic, 18572 Km Elements of Glibat Lafhouda and Twihinate. of airborne gradiometry, 1000 gravimetry • Confirmation of the importance of the two stations and 568 Km of electromagnetic data. new prospects in Fe, Nb, Ta, U and Light • Interpretation of 6 185 Km² of 3D seismic, Rare Earth Elements of Drag Al Farnan and about 57 000 Km of 2D seismic and Lamlaga reprocessing of 1,000 Km of 2D seismic • Intensification of research for Uranium in data. the southern provinces. • 8 exploratory wells were spudded onshore • Signature of 3 MOUs, 1 protocol agreement, of which one was in progress on December 1convention and 4 addenda. 31, 2010 and the re-entry of FES-1 well in • Assignment of 2 projects to the private FES Permit. sector, for their development. • Signature of : 2 new Petroleum Agreements, 2 new Reconnaissance Contracts, 3 applications for Concession Exploitation, Oil shale 13 Petroleum Agreements Amendments, 1 Association Contract amendment, 2 • Signature of one MOU related to Oil Shale. Reconnaissance Contracts Addenda, 1 • Developing a draft regulatory framework Protocol Agreement and 2 Memorandums Of for the extraction of hydrocarbons from oil Understanding (MOU). shale. • Signature of one MOU related to Shale Gas. 6 Mines • Exploration of 17 objectives including 9 for base metals, 5 for precious metals and energy substances and 3 for industrial minerals and rocks. Work in partnership concerned 12 $FWLYLW\5HSRUW ,17(51$7,21$/$1'1$7,21$/&21-81&785(6 International conjuncture hydroelectricity, 22.7% for wind power and consolidation of the resumption of the 13.8% for biofuels. global economic activity with a growth rate estimated at 4.7%, close to the highest levels Fuel prices followed the rise in consumption, recorded rates since 2005, but with regional especially oil. The average price of Brent differences: strong growth over 5 % in stood at $ 79.50 per barrel, increasing by emerging and developing economies (China 29% compared to 2009, while remaining + 10.2%) and a more moderate increase of below the $ 98 reached in 2008. 3% in the U.S. and 1.7% in the Euro zone. The onshore drilling increased by 26% in In 2010, the world consumption of primary the first half of 2010 while offshore drilling energy increased by 5.6%, which is the highest experienced a more modest increase of 7%, increase since 1973. It has accelerated in all due to the moratorium in the Gulf of Mexico. regions, reaching 3. 5% in OECD countries and 7.5% in non - OECD. China overtook the The international energy landscape has U.S. as the first global energy consumption. been marked in 2010 by the rise of global investment in exploration and production Compared to 2009, the demand for oil, estimated at 5 to 10% by the Institut Français natural gas and coal rised respectively by du Pétrole. These investments were essentially 3.1%, 7.4% and 7.6% and their production marked by the revival of drilling activities in the RSK RKK [YdSK YK XSdWX X[dTY ZK ZWd[R WVdVR ZSdKS VK SYdWS TYdSV 7 STdZW RXdKV SK RXdYW RSdXY K R[[R R[[K R[[S R[[T R[[V R[[W R[[Z R[[X R[[Y R[[[ SKKR SKRK SKKK SKKS SKKT SKKV SKKW SKKZ SKKX SKKY SKK[ Course of the 1990 Brent - 2010 ($ / bbl) by 2.2%, 7, 3% and 6.3%. World production sector of development-production, especially of renewable energy has continued to in Brazil and Iraq and in the exploitation of $FWLYLW\5HSRUW grow rapidly with increases of 5.3% for unconventional gas «Shale Gas» in North America. Indeed, drilling activities have activity. Upstream budgets for exploration experienced an increase of 42% in the United have registered an increase of 44% compared States because of the strong growth of «shale to 2009 according to the Metals Economics gas» drilling (+ 65% compared to 2009). Group consultant. As for the rest of the world, the registered increase in drilling activity is estimated at 9% Reinforced by renewed investors’ confidence, according to Baker Hughes. the prices of base metals have resumed their upward from the second half of 2010 As for the gas industry, it has experienced a before ceding some of their gains after the rapid development in 2010 in the context of a uncertainty about China demand. surplus and abundant supply with competitive Moreover, the precious metals have set new prices in the industrial and power sectors. records and would continue their momentum in 2011. The course of the gold reached its In 2010, the global mining industry has highest level in history with 1226 $/ounce. benefited from the resumption of the economic (YROXWLRQRIJOREDO( 3LQYHVWPHQWV WKK VWK VKK TWK TKK SWK G US$ SKK RWK RKK WK K SKKY SKK[ SKRKJI SKRRJI Sources : IFP 4:%l 5 % )l/ /&) % 8 ) 8 % *SKRR $FWLYLW\5HSRUW National conjuncture The macroeconomic indicators of 2010 The year 2010 marks the real start of a confirmed the recovery of the economy, after large-scale exploitation of our solar and showing its resilience to 2009 recession. wind resources. Thus His Majesty the King Thus, the GDP grew by 4% with an increase Mohammed VI, may God assist Him, of 5% for non-agricultural activity and the rise launched on 28 June 2010, the Moroccan of the sectors has been affected by the crisis. integrated wind project of 2000 MW and was published in March 2010 the call for The primary energy consumption, which expressions of interest, for the construction of increased from 15,139 ktoe in 2009 to the first phase of 500 MW solar power plant 16,150 ktoe in 2010, with an increase of of Ouarzazate, planned as part of the 2,000 nearly 6.7%, consolidates the upward trend MW solar project, of energy demand, particularly in petroleum products with nearly 9% and in electricity launched in 2009.